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both a Schedule C, Profit or Loss From Business, for LeBouef
Company and a Form 4797, Sales of Business Property, relating to
Toro Leasing Company.
On the Schedule C, petitioner Jerry LeBouef is listed as the
sole proprietor of LeBouef Company, and the principal business of
the entity is stated to be “CONSTRUCTION”. Additionally, the
question “Did you ‘materially participate’ in the operation of
this business during 1993?” is responded to with a check in the
box marked “Yes”. On the Schedule C, petitioners reported gross
receipts of $244,270 and cost of goods sold of $244,270. The
explanation given for the cost of goods sold figure is “PROJECT
COSTS”. After deduction of $600 in business expenses, LeBouef
Company is shown as having incurred a net loss of $600.
The record also contains petitioners’ returns for the years
immediately preceding and following the period at issue. The
Schedule C for LeBouef Company attached to petitioners’ 1992 Form
1040 shows gross receipts of $60,000, cost of goods sold “PROJECT
COSTS” of $55,000, and business expenses of $1,763, for a net
profit of $3,237. In 1994, petitioners reported gross receipts
for LeBouef Company of $24,500, cost of goods sold “PROJECT
COSTS” of $24,500, business expenses of $14,500, and a net loss
of $14,500.
On their Form 4797 for 1993, petitioners claimed a loss of
$19,791 with respect to business property of Toro Leasing
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Last modified: May 25, 2011